Government pours another $40 billion into AIG

WASHINGTON (AP) -- The government today provided new financial assistance to troubled insurance giant American International Group, including pouring $40 billion into the company in return for partial ownership.

The action, announced jointly by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would not be sufficient to stabilize the teetering company. All told, the moves boost aid to the company to around $150 billion.

The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving taxpayers an ownership stake in the company. In turn, restrictions will be placed on executive compensation at the firm.

It marked the first time money from the $700 billion bailout package Congress enacted last month has gone to any company other than a bank.